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New Zealand Franchising Confidence Index | April 2018

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Results from the latest Franchize Consultants Franchising Confidence Index.

Franchize Consultants are franchising and licensing consulting specialists, focusing on:

1. Helping companies franchise a business
2. Helping established chains improve performance
3. Building franchise and chain management capability

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New Zealand Franchising Confidence Index | April 2018

  1. 1. April 2018 Quarter Results FRANCHISORS REPORT MIXED SENTIMENT
  2. 2. • Franchize Consultants is the first point of contact for companies considering franchising their business • Franchize Consultants helps established franchised (and other network format) chains review and improve performance for both franchisors and franchisees • Franchize Consultants conducts specialist research for franchising insight and practical application • Franchize Consultants builds franchisor executive and franchisee capability and performance through focused training and education programmes About Franchize Consultants
  3. 3. Key Survey Highlights • Franchisors and Service Providers report a mixed sentiment with decreasing confidence in general business conditions • Availability of suitable staff remains a key challenge. • Franchisor sentiment for access to suitable locations drifted slightly in April, whilst Service Providers confidence increased substantially. • Franchisor and Service Provider sentiment towards franchisee sales levels lifted to remain an area of strength. • Franchisor growth prospects sentiment also showed strong increases from both Franchisors and Service Providers.
  4. 4. Background • Quarterly survey of more than 400 New Zealand franchisors and 100 specialist Service Providers (e.g. consultants, banks, accountants, lawyers and publishers) to the franchising community. • Explores confidence in key measures critical to the success of franchising, including the wider environment, growth determinants, and franchising health attributes and franchise system growth prospects. • This survey represents the views of 26 Franchisors and 14 Service Providers.
  5. 5. The Focus GENERAL QUESTION AREAS 1. General business conditions 2. Franchisor growth prospects 3. Franchising growth drivers • Access to capital • Access to suitable franchisees • Access to suitable locations • Access to suitable staff 4. Franchisee growth & profitability prospects • Franchisee sales levels • Franchisee operating costs • Franchisee profitability 5. How are things looking for franchisors and Franchisees in their respective sectors? Respondents indicate whether they expect the following aspects to be better, the same or worse over the next 12 months (compared to the previous 12 months)
  6. 6. The Results Franchisors continued to show a decline in sentiment towards general business conditions. Franchisor sentiment (net negative 11%) decreased from the previous quarter (3%), to its lowest level since this survey began in 2010. Service Providers remained neutral at 0%.
  7. 7. The Results •Franchisors (net 46%) remained stable about prospects for franchisor growth. These results are in line with the net 45% in the previous quarter. Franchisor sentiment toward franchisor growth prospects has improved, climbing back to net 39% up from 23%. Service Providers were similarly positive at a net 21%, up from 0%.
  8. 8. The Results Franchisor sentiment toward access to suitable franchisees has shown improved sentiment this quarter after hitting an all time low in January. April sentiment at net negative 20%, improved from net negative 28%. Service Providers who had been more positive previously have dipped in sentiment dropping to a net 0% from net 7%.
  9. 9. The Results Franchisors and Service Provider sentiment toward the availability of suitable staff dipped further to a net negative 22% from net negative 16% and net negative 50% down from net 0%, respectively. Sentiment appears to be showing caution based on the perceived challenges with upcoming government changes to the immigration policy.
  10. 10. The Results Franchisors sentiment this quarter towards accessing suitable locations, which fluctuates regularly, slipped slightly to net 4%, down from a net 7%. Service Providers sentiment showed more confidence at a net 38%, up from net 14%. •
  11. 11. The Results Whilst there are challenges in some areas, both Franchisor and Service Provider sentiment toward franchisee sales levels were very strong. Franchisors recorded a positive increase at a net 50%, up from 28%. Meanwhile, Services Providers improved from a net 7% to 36%.
  12. 12. The Results Franchisee operating costs, meanwhile, remained a challenge with Franchisor sentiment remaining stagnant at net negative 39%. Service Provider outlook dipped slightly further to a net negative 57% down from January’s net negative 50%.
  13. 13. The Results Franchisors sentiment towards franchisee profitability levels, which are a strong indicator of the economic climate, took a dip to net negative 4%, after lifting slightly in January to net 9%. A very negative decrease, net negative 36%, in January for Service Providers was reversed to a net negative 7%.
  14. 14. The Results Franchisor and Service Provider sentiment toward access to financing moved in opposite directions, with franchisors dipping further to a net negative 21%, down from 0%. Service provider sentiment continued to elevate from a net 7% to a net 14%.
  15. 15. More Information www.franchisingconfidence.co.nz Including: • More detailed and complete results and analysis • All charts and illustrations
  16. 16. Franchize Consultants • The Franchising Confidence Index, is founded, designed and operated by Franchize Consultants, New Zealand specialists in franchising and licensing network development. Founded in 1989, Franchize Consultants have a long and supporting association with New Zealand franchising. • For further information contact Dr Callum Floyd • Ph. (09) 523 3858 • Mob. 021 669 519 • Email. callum@franchize.co.nz • Web. www.franchisingconfidence.co.nz • Web. www.franchize.co.nz

Results from the latest Franchize Consultants Franchising Confidence Index. Franchize Consultants are franchising and licensing consulting specialists, focusing on: 1. Helping companies franchise a business 2. Helping established chains improve performance 3. Building franchise and chain management capability

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